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Global News Morning: Real estate demand update for Halifax – February 24, 2022

Alyse checks in with Clinton Wilkins Mortgage Team for a real estate demand update for Halifax and to see what is keeping the Halifax market so hot and what needs to happen for it to start to cool off.

Global News Morning: Real estate demand update for Halifax

Halifax’s high migration in 2020 and 2021

Alyse Hand: [00:00:00:05] According to a report released last week by the Canadian Housing and Mortgage Corporation, the number of people that move to Halifax from other provinces in Canada in 2021 was the most ever in more than 30 years.

That, coupled with Nova Scotia’s high COVID-19 vaccination rates and low COVID case numbers, made the province really appealing to people from bigger and more crowded cities. But with the announcement yesterday that Nova Scotia will be lifting all COVID-19 restrictions on March 21, could that mean that the province’s hot housing market could finally cool?

Let’s find out what Clinton Wilkins thinks about all this. He’s the principal mortgage broker with Centum Home Lenders Ltd., and Clinton joins us live from Halifax. Hey, Clinton, good morning.

Clinton Wilkins: [00:00:44:09] Hello, Alyse. Thanks for having me.

Is the Halifax market slowing down?

Alyse Hand: [00:00:46:08] Great to see you again. It’s been a little bit. Good to have you back. We are two months into 2022 now, Clinton. Typically, we see things slow down at this time of year when we’re not in a pandemic and things, you know, really slow down in the Halifax area and right across the region. So are things slowing down at all right now in Halifax and across HRM?

Clinton Wilkins: [00:01:08:20] I don’t think things are slowing down in terms of maybe the demand in the marketplace. I think what is really slowing down is, you know, it’s really an impact of supply specifically in HRM. You know we’re record lows in the amount of supply in terms of what homes are for sale. So I think that’s certainly impacting it.

For us in the mortgage industry, it’s very, very busy. So, Alyse, you know, a lot of people that own homes already are obviously looking at refinances and renewals, obviously due to the rates and due to, you know, the benefit of the increased equity that they’ve really appreciated over the last couple of years. I think in terms of new buyers entering the market, certainly there are some challenges, obviously with supply and it’s very competitive out there.

What is keeping the Halifax market so hot?

Alyse Hand: [00:01:55:27] Oh, it sure is. It sure is. And we talk about that often on the show. So that’s good to know. We’re kind of still in this place where we can call the market hot, even though in normal times this would be sort of a slower time. What is keeping the market so hot?

I mentioned off the top there, Clinton, about people coming from away and moving here. Is that still the case? Is that’s what’s keeping the market so hot or are there other factors here right now?

Clinton Wilkins: [00:02:15:15] We’re definitely seeing people relocating from other markets. I think that slowed a little bit, you know, in 2020 and in 2021, you know, I said before that it probably about 30 per cent of the calls that we were getting in our mortgage brokerage were from, you know, buyers getting pre-approved from outside our market. So for markets like B.C. and Ontario, where homeownership is really very unattainable for many people.

The one interesting thing about Halifax and really all of Maritimes and Atlantic Canada, homeownership is still available for many. In Halifax, our average home price has increased to around $500,000, and that is still very affordable compared to many other markets across the country.

When will the Halifax market cool?

Alyse Hand: [00:03:02:14] You’re so right about that. You’re right when we look at it, relatively speaking, we are still, even though that sounds like a lot, half a million dollars, nothing to sneeze at, but that is comparatively, that is lower.

With restrictions being lifted, and this is what I really want to get to this morning, Clinton, and things beginning to get back to normal, we hope on March 21, does that mean that we will finally see the housing market cool?

Clinton Wilkins: [00:03:25:06] I’m not sure we’re going to see it cool. I think we may see less buyers from other markets across the country you know, potentially. That might be a situation. You know, we normally say “Spring into Homeownership,” and that’s normally our busiest time of the year. So, I think it’s a little bit of, I’m cautiously optimistic that the market will start to balance, but I don’t, and I’m not really convinced that it’s going to be balancing until we see a lot more supply come on the market.

Current home owners benefiting from increased values

Obviously, anyone who owns an existing home, it’s a great time to sell because the demand obviously is very, very high and it really is a seller’s market. But you know, we need to understand that if you’re selling and you’re going to sell at a high price, you’re probably going to buy at a high price.

So unless you’re right-sizing or changing, you know, maybe the location of your home or maybe the style of your home, I think in many cases, people that own homes already, potentially are staying put. So they’re not listing it, listing their homes like they normally would, potentially in the spring.

And, you know, existing homeowners are definitely leveraging the equity in their home to do things like renovations and really make their home how they want it. So I think it’s a little bit of wait and see, and I’m cautiously optimistic, but we need a lot more inventory, and I suspect the demand in the market is going to continue likely for the next 20 years.

So I don’t think we’re in a situation where we’re going to see prices soften. I think potentially we’re going to be in a situation where the price growth may slow over the next months and years while we get more inventory online.

No overnight fix, but staying cautiously optimistic

Alyse Hand: [00:05:06:25] Yeah, that makes sense. That’s not an overnight fix this building of inventory and like you just said, two decades, so good to get your insight. I think there was some good news in there.

Clinton Wilkins: [00:05:17:24] I’m optimistic. I’m optimistic, but I’m optimistic all the time, Alyse. So, I think we kind of have to be in this market.

Alyse Hand: [00:05:26:00] That’s right. If there’s one thing Clinton Wilkins is it’s optimistic and very knowledgeable. I think for Clinton, it was great to see you this morning. We appreciate this.

Clinton Wilkins: [00:05:33:08] Thanks for having me, Alyse. Have a great day.

Looking for more information about the local housing market, questions from this mortgage market check-in or other mortgage application advice? Feel free to contact us!